During its 2000 session, the Virginia General Assembly passed legislation that changes
the way Virginia taxes are paid by consumers and collected by utilities.

This change was made to ensure that out-of-state energy suppliers would not gain a
pricing advantage relative to utilities operating in Virginia. Currently, there are three
taxes included in your electric bill that are collected by all electric utilities and
remitted to either state or local governments.

Beginning in January 2001, these three taxes will be replaced with one called the
Virginia Consumption Tax. The Virginia Consumption Tax is not a new tax, but rather it
replaces the three that have been included in your bill all along.

The rates for the Virginia Consumption Tax are fixed in state law and have been set at
a level to approximate the taxes you currently pay. In other words, there should be
little, if any, change in the amount of the tax you pay. Remember, taxes are one component
of your current rates. This tax is not new, it is just different.

Also, you may note that beginning with your January bill, you may see a line item on
your bill that looks like the following: